Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on December 16, 2024, under Item 7.01 Regulation FD Disclosure. The report provides supplemental credit performance statistics for the U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months ended September 30, October 31, and November 30, 2024. It also includes data for the American Express Credit Account Master Trust (Lending Trust) for the same periods.
Key Financial Metrics
U.S. Consumer Card Member Loans
- Total Loans (Nov 2024): $89.3 billion
- 30+ Days Past Due: 1.4% of total loans (consistent across Sep, Oct, Nov 2024)
- Average Loans (Nov 2024): $88.7 billion
- Net Write-off Rate (Principal Only): 2.0% (Nov 2024), 2.4% (Oct 2024), 1.9% (Sep 2024)
U.S. Small Business Card Member Loans
- Total Loans (Nov 2024): $30.7 billion
- 30+ Days Past Due: 1.5% of total loans (consistent across Sep, Oct, Nov 2024)
- Average Loans (Nov 2024): $30.6 billion
- Net Write-off Rate (Principal Only): 2.3% (Nov 2024), 2.2% (Oct 2024), 2.1% (Sep 2024)
Lending Trust (Securitized Loans)
- Ending Principal Balance (Nov 2024): $25.9 billion
- Annualized Default Rate (Net of Recoveries): 1.3% (Nov 2024), 1.5% (Oct 2024), 1.3% (Sep 2024)
- Total 30+ Days Delinquent: $0.2 billion (consistent across all three months)
Material Changes vs. Prior Period
Consumer Portfolio: Total loans increased from $88.0 billion in October to $89.3 billion in November. The net write-off rate decreased to 2.0% in November from 2.4% in October, following a 1.9% rate in September. Delinquency rates remained stable at 1.4%.
Small Business Portfolio: Total loans grew from $30.5 billion in October to $30.7 billion in November. The net write-off rate rose slightly to 2.3% in November from 2.2% in October and 2.1% in September. Delinquency rates remained stable at 1.5%.
Lending Trust: The annualized default rate improved to 1.3% in November from 1.5% in October. The defaulted amount decreased to $0.04 billion in November from $0.05 billion in October.
Management Commentary and Risks
The filing notes that the reported statistics for the total U.S. Consumer and Small Business portfolios differ from the Lending Trust data due to differences in loan mix, vintage, aging, and calculation mechanics (e.g., end-of-period balances vs. average balances). The company highlights that month-to-month variability may occur due to the number of days in a month, holiday timing, seasonality, and third-party data timing. No specific forward-looking guidance or new risk factors were introduced in this specific disclosure.
Investor Verification Checklist
- Verify the trend in net write-off rates for the Small Business portfolio, which has increased for two consecutive months (2.1% to 2.3%).
- Compare the Lending Trust default rates against the broader portfolio write-off rates to assess the impact of securitization on reported credit quality.
- Monitor the stability of 30+ day delinquency rates, which have remained flat despite loan balance growth.
- Review the upcoming Form 10-D filings for the Lending Trust to confirm the consistency of the default rate calculations.